European Commission officials have confirmed that a proposed cap on EU payments under the Common Agriculture Policy (CAP) will affect very few farmers.

In a briefing, on the proposals Commission officials confirmed that capping payments will not free up a lot of new proposals.

"Very few farmers will be affected by the cap. Out of millions of farmers in the EU we are talking about a few thousand affected," an official said.

He indicated that the cap would see just 0.2pc of EU farmers affected by the cap.

The Commission is proposing a reduction of payments as of €60,000 and compulsory capping for payments above €100,000 per farm.

European Agriculture and Rural Development Commissioner Phil Hogan the proposal is designed to ensure a fairer distribution of payments.

He said the amounts freed up will be redistributed within each Member State either through a redistributive direct payment or rural development, primarily to ensure that a higher share of each country's direct payment allocation goes to small and medium-sized farms.

However, under rules proposed by the Commission large farmers will be able to offset the labour costs of the farm against their payments rendering the cap meaningless according to some commentators.

Part-time farmers and income tests

Each country will also have to apply more stringent definitions to ensure only genuine farmers receive support.

The precise definition will be left up to each Member State to decide, based on a number of factors such as income tests, labour inputs on the farm, the object clause of businesses and/or their inclusion in business registers.

The definition must ensure that no support can be granted to those whose agricultural activity forms only an insignificant part of their overall economic activities or those whose principal business activity is not agricultural.

However, it should also not result in precluding support to pluri-active farmers, who are actively farming but who are also engaged in nonagricultural activities outside their farm, as their multiple activities often strengthen the socio-economic fabric of rural areas.